In the U.S., television advertising is considered one of the most effective mass-market advertising formats. Advertising not only provides funding for most privately owned television networks but also serves as a critical tool for companies and businesses to promote products and services. Linear television is broadcast television that has a predefined schedule (e.g., broadcast television over a cable television infrastructure or other embodiment). The majority of television advertisements for linear television consist of brief advertising spots, ranging in length from a few seconds to several minutes. Spot Television (“Spot TV”), for example, is the purchase of commercial time on a market-by-market basis.
Commercial time on linear television is usually sold based on a Cost Per Mille (“CPM”) value of the ad spot, where M is the Roman letter representing 1,000. As such, the CPM value of an advertising spot is the cost for the ad to reach approximately one thousand people. However, the nature of linear programming makes it difficult to calculate the actual number of ads and/or impressions delivered on a per ad basis. As a result, certain statistics are needed to estimate the approximate number of viewers of a particular linear television program. Third parties can provide statistical viewership information for linear television programming, which can in turn serve as a baseline for calculating the CPM of an advertising spot. For example, The Nielson Company provides independent audience sampling (“Nielson ratings”) based on, for example, national statistics, local statistics, and/or audience statistics. Ads can then be sold to advertising agencies (“ad agencies”), which work with advertisers to create an individualized advertising campaign based on, for example, the advertiser's target audience, preferred number of views, cost factors, desired run time of the ad campaign, and other considerations.
Advertising for Video On Demand (“VOD”) has a very different framework compared to linear television. VOD allows viewers to select and request stored video and its accompanying content for presentation at the user's in-home set-top box. Because each VOD presentation is initiated in response to a user request, better viewership statistics are available for VOD advertising that are not available for linear television. As such, VOD advertising is often sold on a cost-per-impression basis. Unlike linear television, VOD advertising can be tracked and quantified at the transaction level for true return on investment. For example, VOD systems can keep viewership statistics such as the geographical area/demographic group of delivery, approximate age group, ad request time, and other detailed ad delivery statistics that are not available for linear ad programming. Advantageously, this allows for targeted VOD ad campaigns based on the desired audience an advertiser wishes to reach.